G060712
Cal. Ct. App.Jan 10, 2023Background:
- Roman James Design Build (the Company) developed four luxury residential projects and sought refinancing in 2018–2019.
- During James’s divorce, opposing counsel David Monarch and his firm recorded lis pendens on the four project properties and notified lenders; a court later granted a motion to expunge the lis pendens.
- The Company sued Monarch and his firm for intentional and negligent interference with prospective economic advantage and intentional interference with contractual relations, alleging the lis pendens caused lenders to withdraw and caused >$30M in damages.
- Respondents moved to strike under California’s anti‑SLAPP statute (Code Civ. Proc., § 425.16), arguing the claims arose from protected petitioning activity (recording lis pendens and related communications).
- The trial court granted the anti‑SLAPP motion, concluding recording a lis pendens is protected conduct and the Company failed to produce admissible evidence showing actual disruption and damages; the court also awarded fees to respondents.
- The Court of Appeal affirmed: lis pendens recording is protected activity, and the Company failed to meet its burden at step two because its proffered evidence (principal’s declaration) was inadmissible hearsay/lacked foundation under Sweetwater and related authorities.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether recording lis pendens is protected activity under § 425.16 | James: the lis pendens here was not privileged/valid, so anti‑SLAPP protection shouldn’t apply | Monarch: recording a lis pendens is petitioning conduct protected by § 425.16(e) | Held: recording a lis pendens is protected activity; lack of privilege does not automatically remove anti‑SLAPP protection (Flatley distinguished) |
| Whether an invalid/unprivileged lis pendens is per se illegal and outside anti‑SLAPP | Company: lis pendens was defective and expunged, so conduct was not protected | Monarch: even potentially invalid lis pendens can be protected; illegality must be conclusively established to defeat protection | Held: mere invalidity or later expungement doesn’t make the act per se illegal for step one; illegality must be conclusively established to preclude protection (Park 100) |
| Whether Company produced admissible evidence showing actual disruption and damages (step two) | Company: James’s declaration shows lenders withdrew because of lis pendens and Company can cure evidentiary gaps at trial | Monarch: plaintiff’s evidence is hearsay/speculative and fails to show actual disruption or damages | Held: Company failed to meet its burden; key portions of James’s declaration were inadmissible hearsay/lacked personal knowledge, and admissible portions did not show actual disruption or damages |
| Whether trial court should have allowed cure or considered hearsay under Sweetwater | Company: Sweetwater permits consideration of hearsay that can be cured by live testimony; court should have allowed opportunity to cure | Monarch: Sweetwater allows consideration only for statements equivalent to affidavits/declarations under penalty of perjury; Company offered no such declarations from lenders | Held: Sweetwater does not permit treating speculative hearsay as proof; plaintiff needed declarations or equivalent sworn statements by competent witnesses and did not provide them (Sanchez affirmed application) |
Key Cases Cited
- Baral v. Schnitt, 1 Cal.5th 376 (describing anti‑SLAPP two‑step framework and purpose)
- Flatley v. Mauro, 39 Cal.4th 299 (distinguishing litigation privilege from anti‑SLAPP scope; illegality must be conclusively established to defeat protection)
- Sweetwater Union High Sch. Dist. v. Gilbane Bldg. Co., 6 Cal.5th 931 (rules on what written evidence/declarations may be considered at anti‑SLAPP second step)
- Park 100 Inv. Grp. II, LLC v. Ryan, 180 Cal.App.4th 795 (lis pendens filing can be protected even if later held invalid; invalidity is not per se illegality)
- La Jolla Group II v. Bruce, 211 Cal.App.4th 461 (recording a lis pendens is a written statement in connection with judicial proceedings — protected)
- Roy Allan Slurry Seal, Inc. v. Am. Asphalt South, Inc., 2 Cal.5th 505 (elements of intentional interference with prospective economic advantage)
- Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal.5th 1130 (elements of tortious interference with contract)
- Sanchez v. Bezos, 80 Cal.App.5th 750 (rejecting attempt to rely on plaintiff’s hearsay declaration absent sworn declarations from primary witnesses)